The proposed bill, known as the "Affordable Homes Act," seeks to alleviate the shortage of affordable and workforce housing in Washington State by restructuring the real estate excise tax. It introduces a tiered tax rate for property sales, with lower rates for transactions under $3,025,000 and a new 1% surcharge on sales above this threshold, effective January 1, 2026. The bill mandates adjustments to these thresholds every four years based on the consumer price index for shelter and reallocates tax revenues to support housing initiatives, including investments in the Washington housing trust fund and a developmental disabilities housing and services account. Key amendments also clarify the definitions related to real estate transactions and establish exemptions for specific property transfers, particularly those benefiting low-income housing developments.

Additionally, the bill creates the Housing Stability Account within the state treasury, funded by the real estate transfer tax, to cover operations, maintenance, and service costs for low-income households. It prioritizes funding for projects aimed at vulnerable populations and outlines responsibilities for qualifying grantees, including the requirement to file affidavits upon property transfer completion. The legislation allows unlimited transfers between qualifying grantees and mandates a study by the Department of Revenue on a local option graduated real estate excise tax, with a report due by January 13, 2025. Overall, the bill aims to streamline affordable housing development, ensure compliance with tax regulations, and enhance support for low-income families.

Statutes affected:
Original Bill: 82.45.060, 43.330.181, 82.45.010
Substitute Bill: 82.45.060, 82.45.230, 43.330.181, 82.45.010